It is almost certain that Gordon Brown will be the next Prime Minister. But David Miliband, a rival, potentially an eventual successor, and currently Secretary of State for the Environment, has green policies radically opposed to Brown's.

Businesses and consumers would be treated very differently if the 41-year old Miliband ever gets the keys to Downing Street. Take his attitude to taxation to reduce greenhouse gas emissions, for instance. Perhaps oddly, it is the Chancellor who is reluctant to resort to fiscal measures. 'Government must provide practical help with, whenever possible, incentives in preference to penalties,' he said last week. In contrast, Miliband's 'Climate Change Strategic Framework' says: 'Tax is a key instrument in climate change mitigation .... The first principle is to put a price on greenhouse gas emissions, equivalent to the damage it causes to the environment and society.'

Brown last week talked about the nitty-gritty of home insulation, eco-friendly light bulbs and VAT on energy-efficient goods. Miliband is taking a different tack: studying the possibility of a personal carbon allowance scheme for all UK citizens; calling for investment in carbon capture and storage (CCS) technology; and advocating swift implementation of taxes so that almost all UK firms would make payments to reflect their carbon emissions.

Brown is much less enthusiastic about personal carbon allowances, is seen as dithery by the CCS industry, and backs global expansion of carbon emissions trading, rather than extending it to cover more industries.

The Conservatives suggest the Chancellor should do more to support CCS projects, which capture and bury gas so that it is not released into the atmosphere. Shadow Chancellor George Osborne told The Observer: 'It's time Gordon Brown stopped just talking the talk on the environment and started walking the walk. It is time to give carbon capture and storage a chance.'

Two major CCS schemes are BP's proposed £500m hydrogen power plant at Peterhead in Aberdeenshire, and Centrica's proposed clean coal project in Teesside. The EU wants to support 12 such projects by 2015, and may make CCS compulsory after 2020 for new power stations using fossil fuels.

Some firms want the UK government to act faster to support CCS schemes, to attract EU funding and gain a lead in this fledgling technology. BP was disappointed when it found it would not receive money this year from the government for the Peterhead project, and has delayed it until the start of 2008 when the cash may be provided.

Professor Stuart Haszeldine, a geologist at Edinburgh University, believes Britain could attract EU finance for CCS projects. 'Britain could be in a good position because we have a privatised electricity market,' he says. 'If two or three CCS plants were built, the market would force them to become competitive and produce at the lowest possible price.'

Haszeldine adds that fast action is justified by environmental concerns as well as the business case. If emissions increase by another 5 per cent 'you get into... unknown consequences', which might include the melting of frozen methane in Siberia, he says. 'But if we can stabilise or reduce emissions in 10 years, we stand a good chance of not crossing that threshold.'

Brown and Miliband have some common ground on the issue of carbon trading. The EU Emissions Trading Scheme (Euts) is likely to be the basis for a new global trading market. By making power plants and others pay for the carbon they discharge, Euts is already the world's main vehicle for limiting emissions. In 2005, organisations in the scheme were given free allocations for emissions. If a power plant needed more, it simply bought more on the Euts market. Euts Phase 2 begins in 2008 when organisations may be given smaller allowances, and an even tougher Euts 3 is due in 2013.

'My ambition is to build a global carbon market, founded on the Euts and centred in London,' said Brown last week. In his projections, that market could grow from $9bn per annum now to $50-100bn.

But Euts has a problem - its price fell from a peak of €30 per carbon tonne of emissions in 2005 to its current level of under €1 because of generous allocations. 'Euts is a good mechanism,' says economist Professor Gordon MacKerron, who advised the government last year on disposing of nuclear waste. 'The major problem is getting politicians to agree to stringent enough caps.'

This week, Defra is due to publish its plans for allocating carbon permits in the UK for Euts 2. Miliband's department could help to raise Euts prices if it decides not to be generous in allocations. Defra and Miliband are also talking about extending the scheme to cover methane, nitrous oxide and the other greenhouse gases, as well as extending Euts beyond the 50 per cent of UK industry it now covers to nearly all commercial sector.

Andris Piebalgs, the EU Energy Commissioner, wants to see Euts at €20-30 this year. At this rate, consumers might see increases of £10 on air tickets, and 5 per cent on utility bills and other purchases covered by Euts.

Brown and the Treasury team will be applauded by many British businesses if they can help to extend Euts around the globe, so that UK firms do not face higher costs than their overseas rivals.

Though Miliband appears more willing than Brown to advocate taxes and even rationing, he has received support from business, including the CBI. And the wider public may also now be receptive to the idea of green taxes, according to Andreas Arvanitakis of analyst Point Carbon. As he says: 'People do understand the issues.'